Dorchester plan approved

Dorchester Pacific said a capital reconstruction plan was approved by security holders at a meeting in Auckland yesterday.

In December 2008, Dorchester's investors voted in favour of a deferred repayment plan.

To date 50c in the dollar of principal has been repaid to debenture holders and 10c in the dollar has been repaid to subordinated note holders.

But the board decided the full repayment of principal was not possible without new capital because of a deterioration in the property market.

Under the plan voted on yesterday, debenture holders will exchange debenture stock for four new securities. The plan is conditional on the company raising a minimum of $8 million of new capital.

Debenture holders voted 80 per cent in favour and subordinated note holders voted 95 per cent in favour.

This passed the 75 per cent approval threshold required. Four resolutions put to shareholders were also overwhelmingly approved.

The company's capital-raising plans are supported by major shareholders Hugh Green Investments and The Business Bakery.

- NZPA